Odisha revises mineral freight rates to curb unfair practices

With a view to rein in unfair practices in mineral transportation rates, the Odisha government has notified the revised freight rates in five mineral-bearing districts in the state. The freight rate revision, the second since August 2015, has been effected by the state government pursuant to the order passed by the Odisha High Court. The court had directed the state government to finalise the freight rate in consultation with the Truck Owners' Association.

According to the notification, for distance above 50 km, the maximum freight rate per km has been increased from Rs 6.40 to Rs 6.60, from Rs 5.10 to Rs 5.20 and from Rs 4.10 to Rs 4.20 for six-wheelers, 10 wheelers & 12 wheelers respectively .

For one way distance up to 50 km, the transport rate is Rs 38 per km and Rs 1,235 per day in case of six wheelers. In case of 10-wheelers the rate, as announced is Rs 53.50 per km and Rs 1,355 per day whereas for 12-wheelers, it is revised to Rs 57.90 per km along with Rs 1,620 per day. The notification has compensated the return idle journey by allowing 40 per cent extra.

Prior to this notification, per-trip charges were prevalent instead of per-day charges.

User industries, however, are doubtful about the ground-level implementation of the revised rates. Steel and other user industries in Odisha have been the victims of monopolistic and unfair trade practices abetted by the local but influential transportation lobby.

Manish Kharbanda, executive director and group head (mines & minerals), Jindal Steel & Power Ltd (JSPL) said, "The state government has notified the new rates based on a consultative exercise as per orders of the High court . Apparently, there is no further scope to dilly-dally or dilute implementation of the notified rates at the ground level . Value-addition industries have already suffered a lot due to the exorbitant and arbitrarily charged mineral transportation rates. The monopoly and mafia at times led by local politicians has to be broken with an iron hand. This is time to act and protect the industries as well as the thousand of local livelihoods dependent on industries".

The All-Odisha Steel Federation (AOSF) feels the remedy lies in enforcing strict implementation of the notified mineral freight rates at the ground level.

"The transportation lobby in collusion with local politicians are dictating mineral transportation rates. As a result, the industries are suffering. There needs to be a strict enforcement of the new rates at the district level", said P L Kandoi, president of AOSF.

Cost of mineral transportation in Odisha is exorbitantly high and is not based on market rates. The transporters continue to charge arbitrarily. The exorbitant rates by the transporters have further increased the raw material cost for industries, especially in iron and steel sector. The increased cost of raw material in turn has affected the viability of these industries.